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Boeing Company (BA) Q3 Earnings in Focus: Deliveries Up

Aerospace and defense major The Boeing Co.BA is set to release third-quarter 2015 results before the opening bell on Oct 21. In the preceding quarter, Boeing delivered a positive 15.71% earnings surprise. Let's see how things are shaping up prior to this announcement.

Factors Influencing Third Quarter

Boeing shares have been on a downward trend since late February, losing 6.3% in the last three months. This offers investors a solid entry point to this leading defense and aerospace company. Recently, it reported strong third-quarter as well as nine-month 2015 delivery numbers. The company delivered 580 commercial jetliners so far this year, increasing 9.8% year over year and beating its archrival Airbus.

In the third quarter, Boeing delivered 199 commercial airplanes compared with 186 deliveries a year ago given continued growth for its 787 Dreamliner and Next Generation 737 single-aisle jetliners. The Next Generation 737 model continues to be the pillar of Boeing's strength in the commercial airplane sector with deliveries of 126 airplanes, followed by its 787 Dreamliner model with 37 deliveries, pumping out at over 12 a month.

Though 787 Dreamliner's increased deferred cost should not come as a shock, it will be interesting to see to what extent the company will be able to restrict the cash drain per aircraft. Boeing anticipates third-quarter 787 deferred production to grow at a rate similar to the second before witnessing a decline in growth in the fourth quarter.

Earnings Whispers?

Our proven model does not conclusively show that Boeing is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here.

Zacks ESP: Boeing has an Earnings ESP of -0.45%. This is because the Most Accurate estimate stands at $2.21 while the Zacks Consensus Estimate is at $2.22.

Zacks Rank: Boeing carries a Zacks Rank #2. Though this increases the predictive power, the company's ESP of -0.45% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

General Dynamics Corp. GD has an Earnings ESP of +4.76% and a Zacks Rank #3. It will report its quarterly result on Oct 28, 2015.

Northrop Grumman Corp. NOC has an Earnings ESP of +4.07% and a Zacks Rank #2. The company is scheduled to report its quarterly result on Oct 28, 2015.

Embraer SA ERJ has an Earnings ESP of +2.44% and a Zacks Rank #3. The company is expected to report its quarterly result on Oct 27, 2015.

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NORTHROP GRUMMN (NOC): Free Stock Analysis Report

EMBRAER AIR-ADR (ERJ): Free Stock Analysis Report

BOEING CO (BA): Free Stock Analysis Report

GENL DYNAMICS (GD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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